By 
The Nigeria Deposit Insurance Corporation (NDIC) has warned that stronger capital buffers alone will not guarantee the stability of Nigeria’s banks, stressing that institutions must complement recapitalisation with effective risk management, regulatory compliance and sound corporate governance.
NDIC Managing Director and Chief Executive Officer, Thompson Oludare, gave the warning in Lagos during a three-day workshop for the Corporation’s senior management and executive staff, organised in collaboration with the Bureau of Public Procurement (BPP).
The workshop, themed “Driving Excellence through Transparency, Compliance, and Efficiency,” focused on strengthening institutional performance and accountability.
Oludare described the banking sector’s recapitalisation, which ended on March 31, as an important step towards improving financial-system resilience. He, however, said raising additional capital should be viewed as the beginning rather than the end of the process.
According to him, regulators and examiners would continue to assess how banks manage risk, comply with regulatory requirements and maintain effective governance structures.
“Capital is a very important aspect in banking,” he said, noting that “risk management, compliance and governance” remain equally important considerations.
He urged banks to deploy their additional capital prudently and in ways that strengthen their institutions rather than simply expanding their balance sheets.
Bank failures highlight importance of early intervention
The NDIC’s position comes as the Corporation continues to manage the consequences of financial institution failures, including the liquidation of 46 microfinance banks whose licences were revoked by the Central Bank of Nigeria (CBN) on July 1.
As the official liquidator of the affected institutions, the NDIC has commenced the verification and payment of insured deposits.
Oludare said eligible depositors were already being paid, with the process supported by Bank Verification Numbers (BVN) and alternative accounts held with other banks.
The approach, he explained, was intended to make the process easier for verified depositors by allowing them to receive their insured funds without necessarily visiting NDIC offices.
He stressed that licence revocation remains a last resort for regulators, with several resolution options available before an institution reaches that point.
These include purchase-and-assumption arrangements, bridge banks, financial support and changes in management.
“Revocation of licence is the last thing that we consider, and we do not take those things lightly,” Oludare said.
He explained that the affected microfinance banks had failed to meet conditions attached to their operating licences, leaving revocation as the most appropriate regulatory action in the circumstances.
Heritage Bank underscores cost of bank failures
Oludare also pointed to the liquidation of Heritage Bank as an illustration of the lengthy and complex process involved in resolving a failed financial institution.
The CBN revoked Heritage Bank’s licence on June 3, 2024, after which the NDIC commenced liquidation and payment of insured deposits.
The Corporation has continued to recover assets, realise investments and pursue outstanding debtors to generate funds for depositors whose balances exceeded the statutory insurance limit.
NDIC figures show that the Corporation declared a first liquidation dividend of N46.6 billion in April 2025 and a second dividend of N24.3 billion in January 2026.
The cumulative liquidation dividend stood at 14.4 kobo for every N1 outstanding above the insured limit.
Oludare said the Corporation would continue to dispose of recovered assets and pursue outstanding debts to generate additional funds for affected depositors.
However, he noted that some assets remained tied up in legal disputes, potentially delaying their realisation.
The experience demonstrates that the collapse of a financial institution does not end with licence revocation. It can lead to years of asset recovery, debt collection, litigation and liquidation before all eligible stakeholders are settled.
Procurement efficiency becomes part of failure resolution
Against this backdrop, Oludare placed procurement efficiency at the centre of the NDIC’s institutional reform agenda.
He said procurement was critical to the Corporation’s statutory responsibilities, including deposit insurance, failure resolution and liquidation of failed institutions.
According to him, inefficient procurement could increase the cost of resolving failed institutions and reduce the resources available for protecting depositors.
The NDIC’s collaboration with the BPP is therefore aimed at strengthening transparency, regulatory compliance and value-for-money principles across the Corporation’s procurement processes.
BPP Director-General, Adebowale Adedokun, said recent reforms had strengthened scrutiny of public procurement through price intelligence and benchmarking.
He explained that the BPP’s Price Intelligence Unit compares proposed project costs with prevailing market prices and professional estimates, allowing excessive quotations to be challenged before approval.
Adedokun said the reforms generated about N400 billion in savings for government during the first six months of 2026, following N1.1 trillion recorded in 2025.
He said the impact of the reforms extended beyond direct savings, as contractors were increasingly adjusting their bids in anticipation of price benchmarking.
According to him, the system was gradually creating a procurement environment focused more on value for money than inflated contract estimates.
Digital procurement to widen access
The BPP chief also disclosed that the Bureau was accelerating the digital transformation of government procurement through online submissions, electronic government procurement and plans to expand access through mobile devices.
He said the objective was to reduce the physical and financial barriers that often prevent contractors, particularly those outside Abuja, from participating effectively in government procurement.
Adedokun cited the example of contractors in states such as Kebbi who could potentially compete for government contracts remotely instead of travelling to Abuja to complete procurement processes.
The BPP is also developing a community-based procurement model that would allow local contractors to compete for smaller projects from their respective locations.
According to Adedokun, the approach could broaden participation, stimulate local economic activity and reduce concerns that access to government contracts depends on personal connections.
The Bureau is equally upgrading its database of contractors, consultants and service providers to support more specialised, sector-based procurement.
Under the proposed approach, contractors would increasingly compete based on demonstrated expertise rather than presenting themselves as capable of executing virtually every category of project.
Adedokun said this would encourage professionalism, improve the quality of public projects and reduce the risk of substandard equipment and services.
Technology to strengthen accountability
The BPP DG identified technology as an important tool for reducing leakages and improving transparency in public procurement.
He said the Bureau was discouraging government agencies from using private email accounts for official transactions and encouraging the adoption of government-domain communication.
Paper-based procurement has also been reduced significantly, he said, with the proportion of paper used in the process falling from about 80 per cent to below 40 per cent.
Artificial intelligence could also support procurement activities such as costing, analysis and report preparation, although Adedokun said the transition would be implemented gradually.
For the NDIC, these improvements have implications beyond administrative efficiency.
The Corporation is responsible for managing depositors’ funds, recovering assets from failed institutions, collecting debts and disposing of properties and investments. Greater transparency and efficiency in these processes can directly influence how quickly depositors recover their funds.
The ongoing Heritage Bank liquidation illustrates the importance of these processes, as the NDIC continues to recover and dispose of assets to finance further liquidation dividends.
Post-recapitalisation focus shifts to resilience
For Nigeria’s banking industry, the central challenge following recapitalisation is therefore not simply whether banks have raised enough capital, but whether they can deploy those funds sustainably without recreating the weaknesses in governance, compliance and risk management that could ultimately threaten financial stability.
The NDIC’s continuing work on failed institutions reinforces the importance of early regulatory intervention, effective supervision, sound governance and efficient failure-resolution mechanisms.
Oludare said the Corporation’s broader objective was to maintain a financial system in which depositors have confidence that their funds are protected while financial institutions remain subject to the discipline required to prevent avoidable failures.
“We do not expect institutions to fail,” he said, while acknowledging that institutional failures remain a reality of financial systems.
Comments